The TechCrunch50 conference is playing to a sell-out crowd, as usual. As in the
past two years, startup CEOs and venture capitalists are mingling, experts are
up on stage critiquing pitches, and everyone is madly tapping away at their
keyboards.

But something is different this year.

As
one anonymous tipster told us, “The recession has finally caught up with
the usually irrepressible entrepreneurial spirit of Silicon Valley.”
Indeed, the Demo Pit
schwag is minimal at best, and the mood is slightly somber–only a few hundred
showed up to the first night’s party, which was a blowout event with Samantha
Ronson on the turntables last year.

Worst of all, the startups aren’t quite exuding creativity. The first day’s People’s
Choice Award for Demo Pit startups was won by a company called YourVersion,
a search engine that discovers content based on past searches and interests (not a new concept), and oDesk,
which hardly counts as a startup. “Hasn’t oDesk been around for years?”asks
one TechCrunch commenter. “And isn’t TC50 suppose to be about new/emerging
technology companies? How were they even allowed in?” Even the much-hyped
Penn & Teller startup, a card trick iPhone app, turned out to be a bust.

If startups are playing it safe, will venture capitalists be as eager to invest as
they were when times were flush? In the past, companies launching at
TechCrunch50 could expect a nice bump in attention and better prospects for
raising money. Some of the more innovative startups from yesterday, including iTwin,Toybots,
and SeatGeek, might snag some funding. But
the mediocre majority? Probably not.